COALITION OF CIVIL SOCIETY/ANTI-CORRUPTION GROUPS OPPOSE CONCESSION OF REFINERIES

The coalitions of Civil Society and Anti corruption groups yesterday oppose the concession of Portharcourt refinery. Below is the text of a press conference

PRELIMINARY COMME.NTS:

We are gathered here today because of our grave concern that, if care is not taken, this government is about to fall into the same abyss of corruption in the petroleum sector for which it is prosecuting officials and friends of the past government. It is ironic that this government is about to be afflicted with the same ailment it promised to cure in the petroleum sector upon coming to power. That singular ailment is impunity.

TIMELINE OF EVENTS:

On May 9, 2017, the Hon. Minister of State for Petroleum Resources announced that the Nigerian Agip Oil Company, a subsidiary of the Italian Oil Company ENI, had “Committed to repairing the Port-Harcourt refinery, as part of a $15,000,000,000.00 (Fifteen Billion Dollars)investment that includes the building of a 150 thousand-barrel-per-day refinery and power plant”. Before proceeding further, let us remind ourselves that ENI is the same company involved in the Malabu scandal from which the country is still reeling.

On May 11, 2017, Mr. Wale Tinubu, the CEO of Oando Plc, told members of the Nigerian Stock Exchange (NSE) that Oando had received approval (in principle) from government to repair, operate and maintain the Port-Harcourt refinery in conjunction with AGIP. This was further confirmed by Oando’s Chief Strategy and Corporate Services Officer on May 16, 2017, when he said the company was a party to the agreement reached between AGIP and the Federal Government to repair, operate and maintain (ROM) Port-Harcourt refinery. He said the final agreement will be reached at the end of July, 2017.

On the 30^th of May, 2017, the Nigerian Senate was the first institution to kick against this clandestine arrangement between the Federal Government and these private companies. On that day, sequel to a motion moved by a distinguished Senator from Jigawa State, Senator Mohammed Sabo, the Senate asked the ministry of Petroleum Resources to stop any further move to concession the Port-Harcourt refinery to AGIP and Oando until it receives a report from a special committee it set up to probe the deal.

OUR CONCERNS AND OPPOSITION:

We are concerned that, despite the queries it raised, the Senate has even opened a small window of possibility to legitimatize this apparently fraudulent concession of a national asset. We are concerned that the Senate, with all due respect, may just want to position itself to be part of the bargain to the detriment of Nigerians. As we shall show shortly, the Senate probe is needles as there is nothing to probe. The deal is patently illegal, morally bankrupt and economically disadvantageous to Nigeria as a country. The Senate should have just adopted a motion to stop it outrightly. Hence, we have decided to form this coalition to fight this illegality until the Federal Government retraces it steps. The following are the grounds upon which we oppose this fraud:

1. THE ILLEGALITY: The concession of any asset or infrastructure of the Federal Government, by whatever name called, must be in strict compliance with the Infrastructure Concession Regulatory Commission (Establishment, ETC) Act, 2005. Section 1 (1) and (2) of the said Act states as follows:

(1):

“As from the commencement of this Act, any Federal Government Ministry Agency, Corporation or body involved in the financing, construction, operation or maintenance of infrastructure, by whatever name called, may enter into a contract with or grant concession to any duly pre-qualified project proponent in the private sector for the financing, construction, operation or maintenance of any infrastructure that is financially viable or any development facility of the Federal Government IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT”

(2):  

“This Act applies to investment and development projects relating to any infrastructure of any Federal Government ministry, agency, corporation or body”

From the above, it can be clearly seen that the planned concession of the Port-Harcourt refinery falls squarely within the contemplation of this Act. Have the Federal Government complied with the provisions of this law? The answer is CAPITAL NO! Sections 4 and 5 of the law states as follows:

4:

“Upon an approval for any project or contract for financing, construction, operation or maintenance of any infrastructure or development project under this Act, the Federal Government Ministry, Agency, Corporation or body concerned shall, BY PUBLICATION IN AT LEAST THREE NATIONAL NEWSPAPERS HAVING WIDE CIRCULATION IN NIGERIA, and such other means of circulation, INVITE OPEN COMPETITIVE PUBLIC BID FOR SUCH PROJECT OR CONTRACT approved under this Act.

(2) With respect to projects under this Act, the concession contract shall be awarded to the bidder who, having satisfied the pre-qualification criteria, submits the most technically and economically responsive bid.

5:

“Notwithstanding section 4 of this Act, and if after advertisement in accordance with section 4 of this Act-;

(a)      Only one contractor or project proponent applied or submits a bid proposal, or

(b)      Only one contractor or projector   proponent meet the prequalification requirements, the ministry, agency corporation, body may undertake direct negotiation without competitive bidding for any contract to be entered into pursuant to section 1 of this Act”   

In this case, there was no advertisement or invitation to bid to which only AGIP/ENI and Oando responded. What we are about to witness is the brazen direct handover of a national asset like the Port-Harcourt refinery to private concerns, without advertisement, without competitive bidding and in gross violation of the law. This is nothing but an economic crime committed by a government against its own people.

We make bold to say that the strict compliance with our laws cannot be sacrificed for some subjective patriotic motives.

2.  THE MORAL BANKRUPTCY OF THE DEAL: This is not the first attempt by government to privatize or concession our refineries. Even before the enactment of the Infrastructure Concession Regulatory Commission Act, the Federal Government proceeded on the basis of international best practices in the process of privatizing the refineries. To adopt another standard this time around is morally reprehensible. The earlier attempt commenced in 2003 and was concluded in 2007 (a painstaking process that took 4 years to complete). Without going into the lengthy details and intricacies of the process that was undertaken, a summary of it was that open and competitive bids were employed at that time to privatise the Port-Harcourt refinery. Credit Suisse was retained as transaction adviser. The following processes were also observed:
3. A Preliminary information memorandum was distributed to a list of companies (including Oil Majors),
4. Information was provided to companies through plants visits, data rooms, forums, etc,
5. Expressions of interest were submitted by 8 firms which were eventually cleared to proceed to the next stage,
6. Financial bids were subsequently submitted and Bluestar emerged the winner.

Unfortunately, for political reason, Bluestar later decided not to proceed with the deal, and it was fully refunded by the Federal Government.

It therefore follows that in such a deal that involves an important national asset, the minimum we expect is a public invitation to bid. The process must be open, honest and transparent and in line with the Privatisation Act, the preferred partners must possess the following:

1. Technical knowledge
2. Acceptable investment plan
3. Financial resources
4. Management ability and
5. A plan for welfare of workers.

In this case, there was no advertisement, no public invitation to bid, no stated criteria for selecting Oando and AGIP/ENI. It was just a clandestine and secret allocation of a national asset to private concerns. No process was followed. No bidding was done.

3.  ECONOMIC DISADVANTAGE OF THIS EXCLUSIVE ARRANGEMENT:  With the way the Federal Government has approached this matter, it is clear that it has robbed itself of the best available bid for its refinery. How is the Federal Government sure that it cannot get a better deal than has been offered by AGIP/ENI?

It is also a deal that would invariably lead to economic sabotage. We all know that as of today, the refineries cannot produce more that forty percent (40%) of their installed capacities. Before the so-called partners can turn the refinery around and increase the production capacity (if they ever will) what would happen to the excess of the unrefined crude from its daily allocation? They would obviously be sold at international rate and the profit will find its way to private pockets! We say NO to this economic sabotage.

4. OUR DEMANDS:
5. The Federal Government must IMMEDIATELY CANCEL the ill-advised, ill-designed and fraudulent transaction.
6. If the Federal Government desires to still go ahead, it must proceed in strict compliance with the Infrastructure Concession Regulatory Commission Act or the Privatization Act (if it is outright privatization).
7.   CONCLUSION:
8. If we do not hear or an outright cancellation of this fraud within forty-eight (48) hours, we shall proceed to court to stop the transaction. We have already briefed our lawyer, Mr. Festus Keyamo, to start preparing our court papers.
9. For whatever it is worth, we shall also proceed to the Senate Committee to defend our position.
10. We are also prepared to mobilize Nigerians for street protests if the Federal Government decides to proceed with this fraudulent transaction.

Thank you and God bless.

ORGANIZATION                                           REPRESENTATIVE

1.  CENTRE FOR ANTI-CORRUPTION                                COMR. DEBO ADENIRAN

AND OPEN LEADERSHIP                                                    (CHAIRMAN)

2. CAMPIGN FOR DEMOCRACY                                      MALLAM ADBUL BAKO USMAN

(PRESIDENT)

3. CENTRE FOR CHANGE                                                COMR. (MS) VERA OKEI

(SEC. GEN)

4. NIGERIANS UNITE AGAINST CORRUPTION                         COMR. OLUFEMI LAWSON

(NATIONAL PUBLICITY SECRETARY)

5. GRASSROOT DEMOCRACTIC INITIATIVE                          COMR. RASAQ OLADOSU

6. EMPOWER AFRICA FOR CHANGE                                      COMR. GBEMI EFFUNUGA

(DIRECTOR)

7. JUSTICE FORUM INITIATIVE                                     MR. GODWIN OGBEIDE

(DIRECTOR)

8. ANTI – CORRUPTION CRUSADERS                              MR. OYEMOLA OYETORO

(DIRECTOR)

9. NATIONAL REBIRTH MOVEMENT                                 COMR. KOLA SALAU

10. CENTRE FOR PUBLIC ACCOUNTABILITY                       ENGR. JUDE OCHIAGA

11. PROTEST TO POWER MOVEMENT (PTP)                      COMR. WALE SALAMI

12. GRASSROOTS POWER POINT (GPP)                 COMR.(PASTOR) SAMSON OLAYIWOLA

13. PEOPLES’ ACTION FOR DEMOCRACY (PAD)               COMRADE ISHOLA ADESHINA

14. CHILDREN PROJECT                                               COMR. TAYO GBADEBO

15. BEKO RIGHTS KLUB   (BRK)                                     COMR.SHIKEMI AWODELE

16. CENTRE FOR CULTURAL AND                                   COMR. ABIODUN RABIU

RELIGIOUS RIGHTS (CECURR)

17. ISOKAN                                                                        COMR. WASIU ISIAKA

18. ALUTA YOUTH COLLECTIVE                                   COMR. (MRS.)  ADETUTU ORENIYI

19. GANI FAWEHINMI SOLIDARITY ASSOCIATION (GFSA)             COMR. EZENWA EZE

20. FREEDOM ALLIANCE                                        COMR. ALFRED OKUDHURU